Most articles about [investing in Japanese real estate](/blog/choose-city-first-investment-japan) focus on yields and GRM ratios. Fewer answer the question that actually determines whether you can close a deal: how much cash do you need, and where does it all go?
This guide does not summarize costs in a vague "5–8% range" and move on. It itemises every fee, tax, and recurring expense with the real numbers — including the ones most websites skip — so you can build an accurate budget before you make an offer.
Note: all figures are for the 2026 fiscal year. Tax rules change; always confirm with a Japanese licensed tax accountant (税理士) before closing.
Part 1: Acquisition Costs — What You Pay at Closing
For a ¥30,000,000 condominium in Tokyo (a realistic entry-level investment property), here is what you actually pay on top of the purchase price.
1. Real Estate Agent Commission (仲介手数料)
Japan has a statutory maximum for agent commissions set by the Ministry of Land:
``` Commission = (3% × purchase price + ¥60,000) × 1.10 (consumption tax) ```
For a ¥30M property:
``` (3% × ¥30,000,000 + ¥60,000) × 1.10 = ¥1,056,000 ```
Important: in most Tokyo transactions, the seller pays the listing agent and the buyer pays the buyer's agent. You are paying close to ¥1.1M in commission regardless of whether you feel like you got service from your agent. On properties under ¥4M, the cap formula differs; above ¥4M, this formula applies universally.
2. Registration Tax (登録免許税)
Paid to register your ownership and any mortgage with the Legal Affairs Bureau. The rates vary by what is being registered:
| Registration Type | Standard Rate | Reduced Rate (temporary measure) | |---|---|---| | Ownership transfer | 2.0% of assessed value | 1.5% (applies to most condos) | | Mortgage establishment | 0.4% of loan amount | 0.1% (temporary reduction) |
The assessed value (固定資産税評価額) is typically 60–70% of market price for condominiums. For our ¥30M example with assessed value ≈ ¥18M:
- Ownership transfer: 1.5% × ¥18M = ¥270,000
- Mortgage (if financing ¥24M): 0.1% × ¥24M = ¥24,000
3. Real Estate Acquisition Tax (不動産取得税)
A one-time prefectural tax due approximately 3–6 months after the purchase is registered. The standard rate is 4%, but residential properties receive a reduction to 3% of assessed value, with additional deductions for newer buildings.
For our ¥30M Tokyo condo (assessed ≈ ¥18M, post-1982 building with standard deduction of ¥12M applied):
``` 3% × (¥18,000,000 − ¥12,000,000) = ¥180,000 ```
This bill arrives months after you close — foreigners are frequently surprised by it. Budget for it on day one.
4. Judicial Scrivener (司法書士費用)
A licensed scrivener (司法書士) handles the ownership transfer registration. This is not optional — Japanese law requires it. Fees are not regulated but typically range from ¥80,000 to ¥200,000 depending on the complexity and the professional. For a standard condo purchase: budget ¥120,000.
5. Stamp Duty (印紙税)
A tax on the purchase and sale agreement document. Rates by purchase price:
| Purchase Price | Stamp Duty | |---|---| | ¥10M–¥50M | ¥20,000 (reduced) | | ¥50M–¥100M | ¥60,000 (reduced) | | Over ¥100M | ¥100,000+ |
For our ¥30M property: ¥20,000.
6. Building Inspection (建物状況調査)
Not legally required, but strongly advisable for resale condominiums built before 2000. A licensed home inspector assesses structural integrity, water damage, and defects. Cost: ¥50,000–¥100,000. Many foreign buyers skip this to save ¥80,000 and later discover repair costs of ¥500,000+. This is a false economy.
7. Fire Insurance (火災保険)
Mandatory if you take a mortgage; strongly advisable regardless. For a Tokyo condo (30m²), a comprehensive policy covering fire, earthquake, and water damage runs approximately ¥30,000–¥80,000 per year. Many buyers pay a multi-year lump sum at closing: budget ¥200,000–¥400,000 for a 5-year policy.
8. Loan Arrangement Fees (融資手数料) — If Financing
If you finance through a Japanese bank (rare for non-residents) or an international bank:
- Origination/arrangement fee: ¥200,000–¥500,000 or 1–2% of loan amount
- Guarantee fee (保証料): ¥400,000–¥1,000,000 depending on lender and LTV
- Appraisal fee: ¥50,000–¥100,000
For non-resident foreign buyers, domestic Japanese bank financing is largely inaccessible. Most use international banks (HSBC Premier, Prestia, OBM Japan) at rates of 2.5–4%, significantly above resident rates of 0.5–1%. See our [financing costs analysis](/blog/japan-financing-costs-impact-returns) for how this affects returns.
Part 1 Summary: Total Acquisition Cost
For a ¥30,000,000 Tokyo condominium, cash purchase:
| Cost Item | Amount | |---|---| | Agent commission | ¥1,056,000 | | Registration tax | ¥270,000 | | Real estate acquisition tax | ¥180,000 | | Judicial scrivener | ¥120,000 | | Stamp duty | ¥20,000 | | Building inspection | ¥80,000 | | Fire insurance (5-year) | ¥300,000 | | Total acquisition costs | ¥2,026,000 | | Total cash required | ¥32,026,000 | | Effective acquisition premium | 6.75% |
If financing ¥24M of the ¥30M: add ¥700,000–¥1,600,000 in loan fees, raising the effective acquisition cost to 7.5–10% of purchase price.
Part 2: Annual Ongoing Costs — What You Pay Every Year
Acquisition costs are one-time. These costs recur every year and directly affect your net yield.
1. Property Tax + City Planning Tax (固定資産税・都市計画税)
Japan's annual property tax system is often misunderstood by foreign investors. It is levied on the assessed value, not the market price — typically 60–70% of market for condominiums.
- Property tax rate: 1.4% of assessed value
- City planning tax (applies in urbanisation promotion areas, which includes all of Tokyo 23 wards): 0.3% of assessed value
For our ¥30M property with assessed value ≈ ¥18M:
``` (1.4% + 0.3%) × ¥18,000,000 = ¥306,000/year ```
Note: the first 3 years after purchase, newly built condos receive a 50% reduction on property tax. Resale properties pay full rate from day one.
2. Condominium Management Fee + Reserve Fund (管理費・修繕積立金)
These are monthly charges set by the building's homeowners association (管理組合). They cover:
- Management fee (管理費): day-to-day building maintenance, cleaning, concierge. Typical range: ¥8,000–¥25,000/month
- Repair reserve fund (修繕積立金): savings pool for major repairs (exterior repainting, elevator replacement, roof work). Typical range: ¥5,000–¥20,000/month, but for older buildings this can be ¥30,000–¥50,000+/month if the fund is underfunded
These fees come out of your rental income before you see a yen of profit. For a typical 30m² Tokyo condo: budget ¥18,000–¥35,000/month = ¥216,000–¥420,000/year.
Buildings with large repair reserve shortfalls (よくある in buildings built pre-1995) have been known to levy special assessments of ¥500,000–¥3,000,000 per unit. Check the reserve fund balance before buying.
3. Property Management Company (管理会社)
Unless you live in Tokyo, you need a property management company to handle tenant relations, maintenance requests, rent collection, and vacancy periods. Fee: 5–10% of monthly rent.
On ¥80,000/month rent: ¥4,000–¥8,000/month = ¥48,000–¥96,000/year.
Some companies also charge a tenant-finding fee (equivalent to 1 month's rent per new tenant), which applies every time a tenant turns over — typically every 2–3 years in Tokyo.
4. Landlord Insurance (家主保険)
Covers rent default, legal expenses, and accidental damage by tenants. Not mandatory but essential for non-resident landlords. Cost: ¥10,000–¥30,000/year.
5. Income Tax on Rental Revenue
This is the cost most investors underestimate. Japan taxes Japanese-source rental income regardless of your tax residency. For non-residents:
- Withholding tax: your tenant or property manager must withhold 20.42% of gross rent and remit it to the Japanese tax authority on your behalf
- If you file a non-resident tax return (which you are required to do), you can deduct depreciation, management fees, repairs, and loan interest — potentially reducing the effective rate significantly
- Residents of countries with a Japan tax treaty (US, UK, Australia, France, Germany, and most of the EU) can apply for reduced withholding rates
For a detailed breakdown of the tax treatment, see our [Japan real estate tax guide for non-residents](/blog/japan-real-estate-tax-non-residents).
Part 2 Summary: Annual Ongoing Cost Estimate
For our ¥30M / ¥80,000/month rent property (non-resident owner, no mortgage):
| Cost Item | Annual Amount | |---|---| | Property tax + city planning | ¥306,000 | | Management fee + reserve fund | ¥300,000 | | Property management company (7%) | ¥67,200 | | Landlord insurance | ¥20,000 | | Total before income tax | ¥693,200 | | As % of gross rent (¥960,000/year) | 72% |
After accounting for all costs, net cash yield on a ¥30M / ¥80,000/month property before income tax is approximately 2.8% — not the 3.2% gross yield the headline numbers suggest. This is why the [GRM is a starting filter, not a final answer](/blog/use-grm-and-yield-japan).
Part 3: Exit Costs — What You Pay When You Sell
1. Agent Commission on Sale
Same formula as purchase: (3% × sale price + ¥60,000) × 1.10. On a ¥30M sale: ¥1,056,000.
2. Capital Gains Tax
Japan's capital gains tax on real estate depends on your holding period:
| Hold Period | Rate (non-resident) | |---|---| | Under 5 years (short-term) | 39.63% (30% national + 9% local + 0.63% reconstruction) | | Over 5 years (long-term) | 20.315% (15% national + 5% local + 0.315% reconstruction) |
The gain is calculated as: Sale price − Adjusted cost basis
Your adjusted cost basis = purchase price + acquisition costs − cumulative depreciation taken.
This depreciation recapture is the trap: if you claimed ¥500,000/year in depreciation for 10 years (¥5,000,000 total), your cost basis is reduced by that amount, increasing the taxable gain even if the property sold at the same price you bought it.
For a full analysis with worked examples, see our [capital gains tax guide](/blog/japan-capital-gains-tax-real-estate).
3. Other Exit Costs
- Mortgage cancellation registration fee (if applicable): ¥30,000–¥50,000
- Judicial scrivener for deregistration: ¥30,000–¥50,000
- Early repayment penalty (if financing): varies by lender
Part 4: The Complete 10-Year Picture
Let us run the full model on our ¥30M / ¥80,000/month property, held for 10 years, cash purchase, sold at the same price:
| Item | Amount | |---|---| | Purchase price | ¥30,000,000 | | Acquisition costs | ¥2,026,000 | | Total cash deployed | ¥32,026,000 | | Gross rent (10 years, 95% occupancy) | ¥9,120,000 | | Annual ongoing costs (10 years) | −¥6,932,000 | | Net operating cash (before income tax) | ¥2,188,000 | | Income tax on net rental (estimated 15% effective) | −¥328,200 | | Net cash from rental | ¥1,859,800 | | Sale proceeds | ¥30,000,000 | | Agent commission on sale | −¥1,056,000 | | Capital gains tax (20.315% on ¥3M gain after depreciation) | −¥609,450 | | Net sale proceeds | ¥28,334,550 | | Total return | ¥30,194,350 | | Profit | ¥30,194,350 − ¥32,026,000 = −¥1,831,650 |
A break-even outcome with flat prices over 10 years. The lesson: at a GRM of 31 (¥30M / ¥80,000 monthly rent), a flat-price scenario barely covers costs. This is why [GRM benchmarks matter](/blog/good-grm-tokyo) — a GRM of 20–22 (equivalent to ~7.5% gross yield) changes this picture dramatically.
These numbers shift significantly depending on your exact financing terms, tax situation, and vacancy assumptions — which is why detailed modelling before any offer is essential.
What Most Websites Do Not Tell You
The repair reserve fund shortfall is the most dangerous hidden cost. Buildings built in the 1980s–1990s often have severely underfunded reserve accounts. A ¥2,000,000 special assessment levied across unit owners destroys your return model. Request the 長期修繕計画 (long-term repair plan) and 修繕積立金残高 (reserve fund balance) before signing any contract.
Vacancy is not zero. Even in high-demand Tokyo, units sit empty between tenants. A conservative model uses 5% vacancy (about 2.5 weeks per year). Some areas, particularly outer wards and buildings with poor management, run 10–15%.
Currency risk is real. If you are converting USD or EUR to JPY to purchase, and the yen strengthens 20% over your hold period, your equity position in home-currency terms shrinks by 20% even if the property performs well in yen terms.
The Bottom Line
For a ¥30M Tokyo condominium:
- Upfront cash required: ¥32–34M (cash purchase) or ¥8–12M down payment + financing fees
- Annual costs: ¥650,000–¥750,000 before income tax
- Breakeven GRM for positive cash flow: approximately GRM 25 or lower at current cost levels
- The deal that actually works: GRM 18–22, station within 5 minutes walk, building with healthy reserve fund, managed by a reputable PM company
Numbers make the difference between a good investment and an expensive mistake. Before you make an offer, model it completely — not just the yield headline.
See also: [How to Buy Property in Japan as a Foreigner](/blog/how-to-buy-property-in-japan-as-foreigner) · [Japan Acquisition Costs Deep Dive](/blog/japan-acquisition-costs-foreign-investors) · [Ongoing Taxes and Running Costs](/blog/japan-ongoing-taxes-running-costs) · [Capital Gains Tax Guide](/blog/japan-capital-gains-tax-real-estate)